Companies are beefing up 'emotional salary' to address today's disengaged workers
Here's what employees must know about culture, career and work-life balance
Former Chrysler and Home Depot chairman Bob Nardelli and FreedomWorks senior economist Steve Moore join 'Maria Bartiromo's Wall Street' to discuss the June jobs report and revisions to the April and May jobs reports.
Over 75% of the global workforce is either not engaged or actively disengaged at work, according to a recent report commissioned by Gallup — and it’s costing the world economy a whopping $8.9 trillion annually.
As this data demonstrates, boosting employee engagement isn’t an easy feat and some employment analysts are noting that companies are now building up "emotional salary" to increase employee engagement and productivity.
But what exactly is an "emotional salary"? And how is it impacting the workforce?
PASSED OVER FOR A PROMOTION? THESE MIGHT BE THE REASONS WHY
Here’s a deeper dive into this HR trend.
What is an ‘emotional salary’?
"Emotional salary" includes the non-monetary aspects of a job, such as culture, career and work-life balance.
"An employee’s emotional salary is the measure of whether they feel rewarded beyond base pay." (iStock / iStock)
"An employee’s emotional salary is the measure of whether they feel rewarded beyond base pay," said Caitlin Nobes, head of workforce research, Achievers Workforce Institute, who is based in Toronto, Canada.
TIKTOK USERS HOST LIVE ‘CO-WORKING’ SESSIONS ON SOCIAL MEDIA APP DURING BUSINESS HOURS
"Emotional salary is completely separate from monetary compensation, which is needed to meet foundational needs for safety and security," she also said.
How can ‘emotional salary’ change employees mindsets?
Employee morale is a vital aspect to productivity.
"Employees who feel their efforts and work go unnoticed are in turn more likely to underperform, disengage and eventually quit," said Nobes.
Another important component of employee engagement is recognition.
"Something as simple as recognition, which is an investment in emotional salary, can shift this narrative," Nobes said.
"Frequent and meaningful recognition is a critical driver of emotional salary, increasing a sense of belonging, engagement and productivity, and lowering the risk of turnover." (iStock / iStock)
"Frequent and meaningful recognition is a critical driver of emotional salary, increasing a sense of belonging, engagement and productivity, and lowering the risk of turnover."
What do employees want in a job package?
Top motivators for job hunting vary depending on a person’s current financial situation, according to the Achievers 2024 Engagement and Retention Report, Nobes said.
"In recent years, inflation and cost-of-living increases have caused 71% of people to say they either struggle to pay their bills or must budget carefully to meet their needs," Nobes told FOX Business.
Career progression and workplace flexibility are higher priorities than pay for certain employees.
Not surprisingly, these workers identify compensation as their No. 1 reason to job hunt in 2024, she said.
However, those who can live comfortably won’t be motivated by higher pay, she said. Career progression and workplace flexibility are higher priorities than pay for these employees.
"This insight is particularly helpful for industries that already pay high salaries (like finance, technology, and life sciences) who are seeing rampant disengagement rates and skills shortages across their work forces," Nobes also said.
"Once we can meet our core needs, compensation is not the only or even the primary factor in our job satisfaction." (iStock / iStock)
Predictably, for most people, money is a means to an end — not a motivator by itself, experts note.
"Once we can meet our core needs, compensation is not the only or even the primary factor in our job satisfaction," she continued. "Many of us can probably think of a job where we were very unhappy despite relatively high wages."
This is where the concept of "emotional salary" comes into play.
Job hunters, as well as current employees, can and should negotiate their packages beyond monetary compensation to meet their wants and needs for intangible benefits.
Nobes said the Achievers’ research shows five ways to increase employees’ emotional salary, which can lead to higher job satisfaction: cultural alignment, recognition, work relationships, feedback and career progress.
WHY THE VIRAL TREND ‘CHRONOWORKING’ IS MAKING WAVES AMONG EMPLOYEES AND EMPLOYERS
"They’re all interconnected and mutually inclusive," she noted.
Also, when organizations align their initiatives with employee priorities, employees are happier, healthier and more committed, the research also found.
This means companies see higher productivity, higher job satisfaction, lower turnover and reduced absenteeism.
How can workers negotiate ‘emotional salary’ perks?
Job hunters, as well as current employees, can and should negotiate their packages beyond monetary compensation to meet their wants and needs for intangible benefits, Nobes said.
"If you’re looking primarily for support and fulfillment, it is important to identify that upfront." (iStock / iStock)
Here are some top strategies.
Do your research. Aim to prioritize the benefits most applicable and interesting to your wants and needs.
"For example, if you’re looking primarily for support and fulfillment, it is important to identify that upfront," she said.
Pointing to specific skills you possess and outcomes you've achieved will give you a leg up.
"Let the employer know this during the interview process and give tangible examples of what this looks like — health/fitness stipend, flexible PTO, regular work events and more."
Showcase your strengths. Present your candidacy in connection to the items that you know are a priority to the organization and role, said Nobes.
"Pointing to specific skills you possess and outcomes you've achieved will give you a leg up when asking about emotional salary components," she said.
To prepare for the conversation of negotiating your compensation package, practice your methods, said one career expert. (iStock / iStock)
Manage your expectations. It’s important to recognize that not every company can meet all expectations. Consider the tradeoffs that you make along the way.
Understand the compensation package. To get a clear picture of the total compensation — which includes your "emotional salary" — LinkedIn career expert Andrew McCaskill, based in Atlanta, Georgia, recommended that those in search of jobs ask pointed questions during the interview process.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
You can also speak to other employees about their experiences within the company, he suggested.
Practice your pitch. To prepare for the conversation of negotiating your compensation package, practice your methods.
CLICK HERE TO SIGN UP FOR OUR LIFESTYLE NEWSLETTER
"The only way to get comfortable talking about money or benefits that translate to money is to talk about it — so practice talking about yourself and your salary and benefits expectations with friends, family, past colleagues or other professional connections to get a better sense of what to ask and how you want to ask it," said McCaskill.
For more Lifestyle articles, visit foxbusiness.com/lifestyle
"And for those who are trying to add to their total compensation, whether that means asking for more PTO or for a more flexible schedule, or for your company to invest in your upskilling: The key is practice."